Welcome to my monthly newsletter. The first week of each month,
I email all my clients my monthly newsletter. This newsletter
includes news events of interest along with announcements of new
real estate developments, updates on on-going developments and
any major transactions of the month. It also includes Real
Estate Updates of interest to each client. Send me an email if
you’d like to receive it each month. If not, it’s posted here
for your reading pleasure.
December, 2009 December 2009 Newsletter
Aloha,
I hope you had a wonderful Thanksgiving - one filled with family, friends, lots of love and good food. We have some good news to start with for this newsletter from the Nov 2nd edition of the Pacific Business News in their article "Hawaii hotel occupancy up to 71%." "Statewide room occupancy was up 1.2 percentage points at 71.1 percent for the week ending Oct. 24. As compared with the same week last year, Hawaii room rates were off 10 percent to average $165.
Occupancy and room rates for the four main Hawaiian islands were as follows:
• Oahu occupancy was up 7.9 percentage points to 83.8 percent, while room rates were down 6.7 percent to $153;
• Maui occupancy was down 7.1 percentage points to 59.2 percent, while room rates dropped 14.7 percent to $200;
• Kauai occupancy slipped 11.6 percentage points to 61.6 percent, while room rates declined 4.8 percent to $188; and
• Big Island occupancy was up slightly at 54.5 percent, while room rates were down 7.2 percent to $149.
Nationwide hotel occupancy dipped 4 percentage points to 59 percent, while room rates dropped 8.3 percent to average $100 a night." When you put Hawaii occupancy in perspective alongside what's going on in the Mainland, it doesn't look too bad after all although we certainly could use less expensive (dare I say "cheaper") room rates!
"Council fights to preserve Koke‘e" is the headline in the Nov 2nd Garden Island newpaper. "The tension surrounding Koke‘e’s future is continuing. The state park’s advisory council is advocating for keeping the park as is while the Department of Land and Natural Resources prepares to implement Recreational Renaissance Plan B (“Back to Basics”), whose intent is to increase repair and maintenance while raising funds for future capital improvements. The volunteer council has heard numerous testimonies from the public (viewable at www.kokeeadvisory.org/comments.htm). The majority of which indicate a passion for preserving the park’s natural beauty.
On the other hand, the DLNR suffers from a lack of funding which they are trying to counteract by raising revenue through entry fee stations at several state parks, including Koke‘e. Though entry fees would not apply to residents, the council members have expressed distaste for them and desire alternative means of raising money to support the parks.
The main area of contention discussed during Tuesday’s council meeting concerns the upcoming auction of recreational residences in Koke‘e. While many residents have indicated they prefer a lottery system — a member of the public declared it “fairest for the locals” — the law currently provides for an auction only. This is something that the advisory council members hope will change. Another member of the public lamented that an auction will favor the “people with deep pockets,” thus shutting out most locals. Chairperson Canen Ho’okano urged residents to contact their legislators if they wish to see this law amended."
If you've been to Koke'e, you've undoubtedly seen the homes up there, not to be confused with the cabins the park rents on a daily basis. These homes are made available through a lease system which is what they are talking about at the end of this article. If it were a lottery system, more "average" people would have a chance at obtaining a lease instead of making it an auction. I'm sure there will be more of this in the weeks and months to come.
The Nov 4th Pacific Business News had the following article in their paper "Kauai home sales climb as prices fall." "Sales of single-family homes and condominiums on Kauai saw increases in October, while prices continued to decline. The median price of a single-family home in October was $446,500, a 13 percent decline from the same month in 2008, when the price was $515,000, according to Hawaii Information Service. The number of sales, however, rose to 32, up from 23, a 39 percent increase. The number of condos sold in October totaled 16, up from nine during the same month in 2008, a 78 percent increase. The median price of a Garden Isle condo last month was $395,000, a 24 percent decrease from $520,000 in October 2008.
Year-to-date figures were down all around. Sales of single-family homes were down 20 percent for the first 10 months of the year, while the median price of $470,000 was down 25 percent from $625,000 during the same period last year. The number of condos sold during the first 10 months of the year was down 16 percent, while the median price, $340,000, was down 38 percent from $547,500 during the same period last year."
The Nov 5th Garden Island article "Home sales up in October" also brought good news regarding real estate sales. "Residential sales gained momentum on Kaua‘i in October compared to last year, according to Multiple Listing Service sales statistics. “October was an unbelievable month; it was a frenzy,” said Aloha Island Properties President and Principal Broker Karen Agudong. Though year-to-date home sales are still down by more than 19 percent in comparison to 2008 for the island, Agudong said she knew last month would increase, as every real estate agent she spoke with in October was “very excited and very busy.” The uptick in sales could largely be linked to the $8,000 first-time homebuyers tax credit which is tentatively set to expire Dec. 1, she said. Since it takes about 45 to 60 days to close escrow, the push to meet deadline was October.
Principal broker for Kaua‘i Landmark Realty Phil Fudge agreed that the “major reason” residential sales were up nearly 40 percent in October compared to 2008 is due to the tax credit. But, what is really “driving the market” right now are short sales and foreclosures, he said. Reduced selling prices on top of low interest rates have inspired new property owners and investors to want to dip their toes into the market, Fudge said. Residential values declined more than 13 percent last month compared to October 2008 and almost 25 percent year to date, according to MLS.
Homes ranging from $400,000 and lower are “what we are seeing,” Agudong said regarding what buyers have generally been purchasing. Mayor Bernard Carvalho Jr.’s Executive Assistant Beth Tokioka said real property assessed values for Kaua‘i County are “clearly on a downward trend,” according to the county’s finance director. Rates are also expected to continue to linger at all-time lows, as the Federal Reserve announced Wednesday that they would be keeping “a key interest rate at a record low for an ‘extended period,’” according to the Associated Press.
The Fed also told the AP that even though the housing market has strengthened, rising unemployment and stricter lending could potentially hold back an economic rebound in the coming months. “Lenders are still holding tight with their money,” Fudge said. “Banks are putting well-qualified people through the ringer.”
That's one of the hardest parts about buying real estate now, getting past the lender. It's tough for everyone, because underwriting guideline can and have changed in the middle of several of my escrows, making it very difficult for even those with excellent credit to get through all the hoops. That's yet another reason why I always encourage my buyers to use a local lender...at least they know the Island and what you are buying.
The Oct 5th Pacific Business News announced a new flight from Oakland to Kauai "Alaska Airlines begins Hawaii flights fr omOakland." Alaska Airlines said it is expanding its service at Oakland International Airport, adding new flights to Hawaii next week. Beginning Nov. 9 Alaska will operate four weekly flights between Oakland and Maui. Then beginning Nov. 10 Alaska will begin thrice-weekly service between Oakland and Kona on the Big Island of Hawaii. The new flights are Alaska Airlines’ first-ever service between the Bay Area and Hawaiian Islands." More flight to Kauai are always good news.
Along with new flights, there is also news that visitor arrivals are up, per the Nov 6th Garden Island article "Visitor spending, arrivals increase." "Things might be looking up for the tourism industry on Kaua‘i, as visitor spending increased for the island more than any other county in the state during September, said Office of Economic Development Director George Costa. Overall expenditures were up more than four percent and Kaua‘i was the only county in September to show an increase of almost 8 percent in per-person spending, he wrote in an e-mail Thursday.
Visitor arrivals increased by two percent on Kaua‘i for September compared to the same month last year. Maui was nearly the same, but O‘ahu grew more than 11 percent and the Big Island reached an almost 10 percent increase.
“Some of the reasons for O‘ahu and Big Island numbers increasing on a higher percentage is that their numbers in previous years were much lower ... so any increase will have a much greater impact then Kaua‘i and Maui who enjoyed great arrivals and occupancies in years past,” Costa wrote in an e-mail via county spokesperson Mary Daubert. The recent increases the island has seen are likely attributed to the Kaua‘i Marathon which brought an influx of visitors during September, Costa added.
The Nov 8th Garden Island had an update on the real estate market in an article entitled "2009 trends in real estate market activity and median prices." "Throughout the first three quarters of 2009, the sales activity of residences, condominiums and land have generally increased quarter-to-quarter. With only four weeks of data, Q4 is on track — for residences and condominiums anyway — to have the highest number of sold transactions all year and even out perform Q4 of 2008. Vacant land however is tracking flat at best and from an activity and median price point perspective is the weakest portion of the Kaua‘i Real Estate market.
Bear in mind that the Kaua‘i real estate market is an insulated one with a relatively small sampling section, therefore a high or low dollar sale, a new condominium project or subdivision can dramatically affect the statistics. Kaua‘i also attracts resort, second home and investor types of buyers, which also has a significant impact on market activity.
Hawai‘i ranked 37th in the country in total foreclosures reported for the month of August. With one in every 583 housing units receiving a foreclosure filing, its foreclosure rate ranked 20th among the 50 states according to RealtyTrac. Kaua‘i County posted the state’s top foreclosure rate in August, with one in every 138 housing units receiving a foreclosure filing. Maui County had the second highest foreclosure rate, with one in every 369 housing units receiving a foreclosure filing during the month. Hawaii County posted the third highest foreclosure rate, where one in every 434 housing units received a foreclosure filing.
The foreclosure rate on Kaua‘i and in Hawai‘i can also be attributed to mainland buyers and investors defaulting on resort properties purchased over the past few years. As many as 46 percent of all Hawaii foreclosures through April were non-owner occupied properties versus 30 percent of non-owner occupied foreclosures across the rest of the country during the same period. The State of Hawaii has a high percentage of second home, resort and investor activity as a whole. According to RealtyTrac, Hawai‘i, accounted for less than one percent of the foreclosure filings reported in August 2009, which made the state a minor contributor to the nation’s foreclosure activity. RealtyTrac includes commercial properties, which include condo-tels and timeshares in the foreclosure data, and sometimes includes properties multiple times in the three-phase foreclosure process.
What’s next? It does appear though that there are economic indicators and signs that maybe we have bottomed out insofar as the real estate market activity is concerned. With foreclosure activity in Hawaii on the rise and the looming specter of option adjustable-rate mortgages resetting to significantly higher payments in the next two-years, the real estate market recovery is still fragile, but showing signs of life.
The good news is that buyers can still find motivated sellers, some of whom may offer seller financing. Interest rates still hover at historic lows and first-time buyer incentive programs may be extended. When using the Median Sales Price as a barometer, the sold property prices on Kaua‘i are now comparable to 2004 or earlier levels." Finally, someone is painting real estate in a positive light instead of the doom and gloom to which we're become accustomed.
At some point in the future, visitors to Lihue will find a much different looking town center than they do now per the Nov 12 Garden Island article "Lihu‘e Town Core Plan amended" "Lihue — The long-term plan that could one day turn downtown Lihu‘e into a pedestrian paradise has taken a significant step forward in recent weeks.
The Kaua‘i Planning Commission on Tuesday made changes to the proposed ordinance that would implement the Lihu‘e Town Core Urban Design Plan, two weeks after it originally closed public testimony and first approved the proposal. The changes were recommended by Planner Marie Williams and will effectively grandfather in non-conforming uses already in existence in four special planning areas created by the plan.
The Rice Street Neighborhood Design District “is envisioned as Lihu‘e’s ‘main street,’” according to the plan, and will “include boutique-type businesses and eateries (that fill the needs of nearby workers and local residents as well as sell local artwork and crafts), service-oriented shops and offices, and primary housing that will help activate the area at all hours of the day.”
The Kuhio Highway Neighborhood Design District, “the major gateway to Lihu‘e,” will be redesigned to create a more pedestrian-friendly environment and encourage walking along the road, the plan states.
The Akahi, Elua and Umi Streets Neighborhood Design District, “the transition area between residential land uses and the higher intensity commercial, retail and office uses along Kuhio Highway and the public uses within the Civic Center,” will see enhanced “pedestrian linkages” with new sidewalks on both sides of all roads, the plan states.
The Lihu‘e Civic Center and Community Facilities Neighborhood Design District, described in the Kaua‘i General Plan as the “heart” of Lihu‘e, will serve as a “hub” or “civic node” for the area, and development around the Civic Center will be compatible with and compliment the historic building and landmarks, the plan states." I wonder how long it will take before we see any of this come to fruition.
The Nov 14th Garden Island article "Flooding forces evacuations" detailed our first winter storm of the season. "Wind-swept rains deluged Kaua‘i on Saturday, flooding homes, forcing evacuations, cutting power and closing down some parts of the island. County and state crews worked throughout the day to restore electricity and reopen roads and bridges while residents banded together to help those in need. Maka‘ala Ka‘aumoana of the Hanalei Watershed Hui said there were “white out” conditions on the North Shore and likely “historic” amounts of precipitation.
Seventeen residents and farm workers were evacuated from Hanalei Valley over the course of 3.5 hours due to flooding or the threat of flooding, a county news release says. Fire officials noted that Bino Fitzgerald, the owner of Hanalei Poi, stopped at the Hanalei fire station and offered the use of his 13-foot inflatable boat and his pilot services for the evacuation.
Fitzgerald was joined by Hanalei firefighter Kellen Ponce and the two of them shuttled the evacuees from Hanalei Valley to the Hanalei Bridge between 11:45 a.m. and 3:25 p.m., and awaiting firefighters from the Hanalei station brought them to the station. From there, the evacuees were picked up by friends and family.
Meanwhile, the crew of Truck 1, who had to remain in Hanalei town due to the closure of the Hanalei Bridge, spent the day responding to medical calls and other calls. More than 17 inches of rain fell over the 24-hour period ending at 5 p.m. Saturday at the Hanalei River gage, according to the National Weather Service. Thirteen inches fell in Kapahi, 11.30 at Opaeka‘a Stream, 11.38 in Wailua and 7.34 in Lihu‘e over the same period." You learn pretty quickly around here that Mother Nature always rules.
Also in the Nov 14th Garden Island was the article "Community Garden Opens in Kilauea. "The opening of a four-acre community garden in Kilauea is one small step toward island sustainability and one giant leap for the community. Connecting with one another was the only way this could become a reality, Malama Kaua‘i Executive Director Keone Kealoha said at the blessing ceremony for the garden Thursday morning. “This is a result of what we can do,” he said.
Because of the cohesive efforts of land and financial donors, as well as hard working community members, plots are now available for use by individuals, families, businesses and any other type of organization interested in growing their own food, he said. Reminding attendees about the importance of the ‘aina and its ability to nurture the community was Mayor Bernard Carvalho Jr., who offered one of the first plantings Thursday morning. “It’s our responsibility to understand how important the resources are,” he said after grabbing a fistful of red dirt. “We’ve got to start somewhere ... this is a great place to begin.” What a great idea!
The Nov 15th Honlulu Advertiser had great news to report in their article "Obama announces Hawaii as site for 2011 APEC meetings." "President Obama's announcement last night that Honolulu will host the Asia-Pacific Economic Cooperation annual meeting in 2011 put his hometown at the center of one of his most important international initiatives. Hawaii has been vying for months to host the gathering of 21 heads of government from the Asia-Pacific region who discuss the economy, trade and investments. And last night, leaders from Washington, D.C., to Downtown Honolulu praised Hawai'i's selection as a way to put the state on the map as a serious international business meeting place where East meets West year-round.
East-West Center President Charles Morrison said the summit is expected to bring 19 heads of state, many Cabinet ministers and other high-ranking officials, and more than 10,000 participants. Holding the leaders meeting in Hawai'i "attracts attention and excitement no amount of money can buy," said Morrison, who is attending this year's APEC meeting in Singapore.
"Hawai'i has never had anything remotely approaching an international meeting where the president of the U.S., president of China, prime minister of Japan, and many other heads of state come at the same time, not to mention something like 75 Cabinet officials, the heads of the World Bank, International Monetary Fund, and World Trade Organization, and leading regional and global business people," Morrison said. He added, "This may be arguably the biggest and most open international meeting of 2011, and it's in Hawai'i." The 2011 event will be held from Nov. 12 to 20." This is really big news for Hawaii and will dramatically impact the economy in a positive fashion this time next year.
Pacific Business News reported in their Nov 18th issues that "Wells Fargo will close 3 Hawaii stores." "Wells Fargo Financial will close three stores on the Big Island and Kauai next week as part of a plan to consolidate its Hawaii operations. The plan to close the Hilo, Kailua-Kona and Lihue stores is in response to the slow economy, a company spokesman said. Customers on the Big Island and Kauai will be served by one of the company’s three remaining stores in Wailuku on Maui and in Aiea and Waipahu on Oahu. The company, which offers home equity and auto loans and credit cards, has 40 employees in Hawaii.
All of the employees on the Big Island and Kauai were offered the opportunity to transfer to one of the other Hawaii stores or the Mainland, the company said. Most chose to take the transfer offer, but seven employees turned it down and elected to receive a severance package, the company said."
Per the Nov 24th Pacific Business News "Delta will add San Diego-Honolulu." "Delta Air Lines will add daily service between San Diego and Honolulu next summer. Beginning June 3, 2010, Delta will fly a Boeing 757 once daily between the cities. Tickets are now available via www.delta.com. “This route is one of many that has been created by the expanded customer base through our merger with Northwest Airlines, which allows us to bring new services to market that previously did not have the demand to sustain nonstop flights,” said Kent Landers, Delta spokesman at the carrier’s headquarters in Atlanta." I have several friends on Island that are from the San Diego area who were delighted to hear about this.
Aslo in the Pacific Business News on Nov 25: "Hawaii women's pay among top in U.S." "Hawaii is among the top 20 places in the U.S. for women salaries, according to Forbes.com. The median weekly earnings for women who work full time in Hawaii was $652, according to a Forbes Woman’s ranking based on July 2009 data from the Bureau of Labor Statistics. Forbes ranked Washington, D.C. the No. 1 spot for women to earn high salaries. There, women make a median of $866 per week.
Female workers in Maryland saw a median weekly income of $774, bringing it to No. 2 on the list. The 1.06 million working women in Maryland made 83.6 percent of what men earn and see an annual median salary of $40,248. Other high ranking states were Connecticut, No. 3; Massachusetts, No. 4; and California, No. 5. Hawaii ranked No. 17 on the list. The difference between the highest median weekly income and the lowest in Mississippi was $356, an annual loss of $18,512 depending on where a woman live." If needed yet another reason to come to Hawaii, there you have it!
I'd like to end this newsletter on a high note by reporting that the estate known as "Tara" finally sold. The Nov 27th Wall Street Journal reported that "Hollywood's Guber Sells For $28 Million in Kauai." "Movie executive Peter Guber has sold his Kauai home for $28 million, nearly four times what he paid 11 years ago. Mr. Guber first listed the Hawaiian estate about four years ago for $46.5 million.
The roughly 174-acre property, which Mr. Guber named Tara Plantation, is on the eastern side of Kauai and includes a 13,154-square-foot plantation-style main house with six bedrooms, eight baths and a powder room. The property has two guest houses; horse stables, a pool, beach cabana and yoga studio; and a caretaker's house. The 67-year-old Mr. Guber, whose production credits include "Rain Man" and the 1989 "Batman," bought the oceanfront property for nearly $7.5 million in 1998 through Mandalay Properties Hawaii LLC.
A former chief executive of Sony Pictures Entertainment, Mr. Guber is chairman and CEO of Mandalay Entertainment Group. He had cut Tara Plantation's offering price to $39.5 million in December." I might add that the "Tara" sign on the rock wall has been removed. If you have the urge to buy or sell - be it for a $135,000 or $33M, please do call.
Now on to your monthly update - but before I get to that, since we are almost at year's end, I'd like to take this opportunity to thank you for your continuing interest in my newsletter, my blog, my weekly condo update -- all of it. It means so very much to me to know that I am able to be of service to you. I wish you a very Mele Kalikimaka! Now --- the update....
.jpg){kind=small}
